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LANSING -- A Native American tribe in Michigan that wants to build a $245 million casino in downtown Lansing has another hurdle to jump over.

The U.S. Department of Interior denied this week the Sault St. Marie Tribe of the Chippewa Indians' land applications for the proposed Kewadin Lansing Casino. The applications were filed by the tribe over two years ago.

"We have no intent on giving up, and we will soon determine which option - legal, administrative or legislative - will we pursue to continue our fight for our legal rights," Payment said.

Mayor Virg Bernero said in a statement his administration will also "continue to fight." He stressed the benefits a casino would bring to the city. Bernero said in 2015 he expects the casino to create 1,500 permanent jobs and 700 construction jobs.

"The revenues generated by such a facility would provide critical resources and services for the Tribe and its members, as well as fully funding the Lansing Promise scholarship program that would provide four years of free college tuition to Lansing’s children," Bernero said Thursday. "We knew from the beginning this process would be long and arduous and we look forward to the next steps toward bringing the benefits of a casino to the Tribe and the city.”

Lansing Mayor Virg Bernero touted in 2012 the benefits of a casino in downtown Lansing. The tribe involved in the project didn't receive this week federal approval to move the project forward.(Photo: LSJ file photo)

A four-page letter from the Department of Interior, dated Monday and written by James Cason, associate deputy secretary, states why the tribe's Lansing project was denied.

Cason wrote two applications for the proposed casino couldn't be approved because they "lack sufficient evidence to demonstrate that acquisition of the parcels would consolidate or enhance tribal lands."

These two tribes have claimed for years the Lansing casino project violates the 1997 Michigan Indian Land Claims Settlement Act. They argued laws support their stance that the Sault Ste. Marie tribe doesn't have the right to build on the land needed for the project.

Frank Cloutier, the Saginaw Chippewa tribe's chief, said in a statement the Sault Ste. Marie tribe and Bernero have "continued to mislead the people of Lansing" with the notion a proposed casino would receive federal approval.

"Mayor Bernero was wrong when he indicated several years ago that this (casino review) process would take a few months; he was wrong when he said that Interior would approve the applications; and he is wrong now to expect any future outcome in what has been an ill-advised scheme to circumvent well established federal law governing Indian gaming," Cloutier said. "We always anticipated that the Interior Department would reject these applications. Now that they have, we hope that the leadership of Lansing will move onto other matters."

The Sault St. Marie tribe still owns a portion of land it needs in downtown Lansing near the Lansing Center to move the casino forward. In 2012, the city sold the tribe a parcel of land at Michigan Avenue and Cedar Street for about $287,000.

A lawyer for the tribe told the Lansing State Journal in January that the city is leasing the land for a $1 and would buy the property back "at fair market value" if the project falls through.

Plans for the Kewadin Lansing casino call for up to 3,000 slot machines, 48 table games and several bars and restaurants. Plans include two parking decks with about 2,900 spaces.

The Sault Ste. Marie tribe also has plans to build a casino in Huron Township, near Detroit Metro Airport. But the Department of Interior also denied applications for that project this week. The tribe once owned Detroit's Greektown Casino, but lost control of it during a 2008 bankruptcy.

Contact Eric Lacy at (517) 377-1206 or elacy@lsj.com. Follow him on Twitter @EricLacy.